THE BENEFITS OF RENTAL
Rental AdvantagesAs an affordable means of financing non-income generating equipment, To assist you in deciding on which financing option would best suit your needs, we have summarized the salient points of the rental option.
No Capital OutlayMonthly rentals of capital equipment are an affordable option and allow you the use of the CCTV equipment with no capital outlay.
Tax AdvantagesRentals are 100% tax deductible as an operating expense, thereby minimizing income tax obligations. (Letter of ownership ceeding system to you at end of lease period)
VAT ImplicationsPayment of VAT up front is avoided and thus is not capitalized over the period of the agreement. The client will be entitled to claim monthly VAT payments made.
Off-Balance Sheet FinancingAs rentals are totally “off balance sheet finance”, current and return on asset ratios are improved. There is also a saving of costly administration as fixed asset registers and depreciation schedules are not affected. Rentals are shown as an operating expense in the income and expenditure statement and not as a current liability. As rentals are an operating expense and not a capital expense they are not governed by capital expenditure budgets.
Diversification of Financial ResourcesRental facilities offer the end-user a new source of finance, existing credit facilities from the bank sector are therefore not affected. Rentals may be escalated on an annual basis, thereby reducing initial costs and linking rental payments to inflation.
UpgradesYou have the option of upgrading the equipment before the end of the contract thereby providing the flexibility to change in line with modern technology. Ownership, if required, can revert to you at the end of the contract, via the supplier of equipment